Ensuring Data Security in Software Development Outsourcing: Best Practices and Tips

Jan Feliciano

August 16, 2023

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Amidst rapid technological advancements, data security remains a paramount concern for modern businesses. The headlines are rife with stories of major breaches, highlighting the increasing sophistication of hacking methods.

For companies engaged in outsourcing, safeguarding data integrity isn’t just a priority; it’s a necessity for fostering a successful collaboration.

The path to secure outsourcing is riddled with intricate challenges, with data leaks happening all over the world. Both the private, government and even corporate groups experience a data breach. With hackers from all parts of the world, every corporate entity is vulnerable to significant security risks and must do its best to protect itself from a data breach. And this threat would be doubled if a company plans to hire an outsourcing provider.

So how can businesses guarantee robust data security for themselves, outsourcing partners, and their clients throughout the outsourcing process? What are the established procedures that outsourcing entities should adhere to to ensure the highest security and quality standards?

This article delves into the key processes of data security issues in outsourcing, unraveling the best practices that fortify your company from a serious data privacy breach.

Data Security Issues in Outsourcing

Outsourcing has transcended industry boundaries, becoming a widespread practice for companies of all scales. This strategy promises compelling advantages, from substantial cost reduction to amplified operational efficiency.

By tapping into external talent pools, businesses can broaden their horizons, encompassing a spectrum of functions from software development to human resources.

Yet, beneath the veneer of these benefits lies a profound concern – data security risks. Entrusting key operations to an external partner necessitates a comprehensive assessment of their adherence to industry standards. Certifications are the bedrock of this evaluation.

Standard protocols for unwavering data security measures employ ISO 9001 and ISO 27001. And this is a must for any outsourcing company as they need an information security management system.

The Crucial Role of ISO and PCI to Prevent Data Breaches

A pivotal step in the journey of outsourcing security is gauging the certifications your potential collaborator possesses. ISO 9001 and ISO 27001 are emblematic of this security regime, laying the groundwork for meticulous security protocols.

Intricacies of ISO/IEC 27001:

ISO/IEC 27001 unfurls a systematic approach toward security threats and their implications. A comprehensive suite of controls is systematically implemented to counter these threats. This standard necessitates the perpetual maintenance of information security systems and controls to ensure they align with stringent benchmarks.

The Imprint of PCI:

For call centers, the importance of PCI compliance is paramount. It orchestrates the protective symphony of protecting customer data, shielding sensitive financial information, and facilitating secure phone-based transactions. Security breaches can be greatly prevented with these protocols and approaches.

Sentinels of Physical Security – Protecting Sensitive Data

The location of the outsourcing facility becomes the initial litmus test for its security ecosystem. However, this is a sphere where many Business Process Outsourcing (BPO) providers falter. Data attacks may also happen in the data storage units of third-party service providers.

In order to protect customer data, a facility should be ensconced in a secure zone, ideally within Special Economic Zones (SEZ). These zones require explicit governmental authorization for entry, exemplifying the commitment to safeguarding operations and keeping your data secure.

Vigilant Guardians of Office Space:

When outsourcing, companies could be half a world away from each other, and therefore, finding a company that has secure and protected offices are important.

The guardianship of office data security commences at the cusp of entry into production floors from commercial spaces. A realm of restricted access cards should greet you at the threshold, augmented by biometric fingerprinting authentication for employees.

This multifaceted defense mechanism ensures that doors remain impervious unless a verified fingerprint is presented. Sensitive domains of the office, such as server rooms, should remain the bastion of top-tier management, accessed only through specialized cards or biometric clearance.

Guarding the Virtual Gateway:

The internet’s gateway, too, should be fortified and accessible solely to upper echelons or designated associates. This imparts a protective mantle against personal emails and unauthorized access to social media during interactions involving private data.

A robust firewall must be an indomitable gatekeeper. Additionally, insist on secure Virtual Private Network (VPN) connections for handling your data.

A Deeper Dive into Data Annotation Ventures

The surge in Machine Learning and Artificial Intelligence products has ushered in a new era. Outsourcing the development and operation of machine learning software, often laden with user and company data, has become the norm. However, such ventures necessitate augmented security protocols and meticulous adherence to best practices.

The Judicial Touch

The involvement of the legal department is pivotal. Protecting your customer’s data from current and former employees are needed. Contractual obligations should explicitly delineate data ownership and the distribution of data-related responsibilities within the outsourcing framework.

Every employee must be bound by a Non-Disclosure Agreement. An extensive training program upon onboarding should enlighten employees on copyright regulations and their implications.

Harmonizing Cloud Operations and DevOps:

The dynamism of cloud operations and DevOps methodologies inject efficiency into software development. However, roles with access to sensitive data must be meticulously structured from a legal standpoint, especially in data-critical projects.

Opting for the services of an external third-party security audit firm could amplify the veracity of your data security measures, both for you and your outsourcing partner.

Deciphering the Outsourcing Audit Landscape:

The eminence of ISO 27001 in auditing an outsourcing partner cannot be overstated. Audits can be categorized into three fundamental types: first-party, second-party, and third-party audits.

A Glimpse into Auditing:

• First-party Audit: Often termed an “internal” audit, it’s executed by a company’s own employees.

• Second-party Audit: This pertains to audits conducted on suppliers. It offers an effective mechanism for businesses engaging with an outsourced software development provider.

• Third-party Audit: This genre ensues when a company chooses to align with international standards such as ISO, enlisting an external entity to conduct audits.

Empowering the Second-party Audit:

For companies harnessing the capabilities of an outsourcing partner, second-party audits stand as a formidable tool. The scope and prerogatives of these audits should be unambiguously delineated in the legal framework, mitigating potential legal bottlenecks.

Outsourcing carries promises and perils in a universe where data is an invaluable asset. Safeguarding data security isn’t just a facet of successful collaboration; it’s the cornerstone of it.

By embracing these best practices, businesses can traverse the outsourcing landscape with an unwavering commitment to data security, ensuring their operations and the sanctity of their client’s sensitive information remains steadfastly shielded.


Securing your company’s data amidst outsourcing is not a mere obligation; it’s a testament to your commitment to preserving the sanctity of your business and your client’s trust. As the digital landscape evolves, data security remains an unyielding cornerstone, shaping your success trajectory.

At CoDev, we recognize the paramount importance of data security in outsourcing. Our unwavering dedication to ISO 27001 standards and a robust infrastructure fortified by stringent physical and virtual security measures ensure that your data remains impervious to threats.

We understand that finding top talent is just the first step!

Our dedicated team provides seamless support throughout the hiring process, ensuring a smooth integration for your new hires and your existing team. Partner with CoDev and, together, we’ll foster an environment of collaboration and innovation.

Jan Feliciano

Jan Feliciano

Jan Feliciano, a full-time content marketer with 10+ years of total writing experience, has worked in different production environments centering on the B2B space. He dives deep into complex topics and distills them into digestible yet engaging content pieces.

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